Pinnacle West stock price target cut to $109 by Jefferies

Published 05/05/2025, 22:00
Pinnacle West stock price target cut to $109 by Jefferies

On Monday, Pinnacle West Capital (NYSE:PNW), currently trading at $93.91 and near its 52-week high of $96.50, saw its price target adjusted by Jefferies, with the firm setting the new target at $109.00, down from the previous $111.00, while reiterating a Buy rating on the stock. The revision reflects a strategic emphasis on long-term growth prospects, particularly from high-load customers such as TSMC and wider economic development initiatives. According to InvestingPro, the company has demonstrated strong financial stability with a 10.69% revenue growth and maintains a track record of 13 consecutive years of dividend increases.

Jefferies highlighted that Pinnacle West Capital is poised to potentially surpass its current Request for Proposals (RFP) target of procuring 2,000 megawatts by the years 2028 to 2030. The results of this RFP are expected to be available in the fourth quarter of 2025. The firm noted that accelerated timelines for customer projects could lead to increased demand within the existing plan.

The analyst from Jefferies also pointed out that Pinnacle West Capital might implement formula rates by 2027, which could further impact the company’s financial structure and customer billing. The firm’s positive outlook on the stock is maintained with the reiterated Buy rating, despite the slight decrease in the price target.

Pinnacle West Capital, based in Phoenix, Arizona, is a holding company with consolidated assets, focusing on electric service provision through its subsidiary, Arizona Public Service. The company’s strategic shift and potential for growth come at a time when the energy sector is increasingly looking towards sustainable and long-term development to meet the rising energy demands.

Investors will be watching closely as Pinnacle West Capital continues to navigate the evolving energy landscape, with the anticipated RFP results in late 2025 serving as a significant milestone for the company’s growth trajectory.

In other recent news, Pinnacle West Capital Corporation reported a surprising loss for the first quarter of 2025, with earnings per share at -$0.04, missing the forecasted $0.02. Despite the earnings miss, Pinnacle West exceeded revenue expectations, reporting $1.03 billion against a forecast of $988.95 million. The company’s performance was affected by the absence of a one-time benefit from the sale of Wright Canyon Energy in 2024, along with increased operational and maintenance expenses. However, new rates, gains from equity investments, and higher transmission sales provided some financial support. Pinnacle West continues to invest in grid modernization and infrastructure to support Arizona’s economic growth, particularly in the semiconductor and manufacturing sectors. The company plans to file a mid-year rate case and is exploring a formula rate plan to reduce regulatory lag. Additionally, Pinnacle West is seeking to add over 2,000 megawatts of new resources by 2028-2030. The company’s management emphasized Arizona’s leadership in semiconductor and advanced manufacturing as a key driver of economic growth.

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